New strategy needed to build homes for the most needy
I READ with interest the headline proclaiming there were 11,000 homes that had planning permission and were just waiting for builders to get started. All of this in just one northern city.
The inference was clear; we have thousands of homes in towns and cities across the country waiting to be built by the private sector. So why don’t they just get on with it instead of blatantly land banking?
Unfortunately, the reality is not quite so straightforward. It is true that in some areas, the number of homes completed annually is less than a quarter of those built at the peak of the building boom. It is also true that demand continues to outstrip supply with almost 21,000 people on the council’s waiting list in Bradford alone. Why then are all these approved housing schemes not being built and why are we continually failing to meet our targets to tackle the UK’s housing crisis?
Many sites with valid planning permission were purchased at the height of the building boom. Now, with rising construction costs and poor end values it does not make financial sense to bring some of these schemes forward in the short term.
Demand, particularly for affordable housing, has changed. It is family homes that are needed, not hundreds of high-rise city-centre apartments that form the bulk of these permissions. In addition, the forthcoming changes to housing benefit will have a marked effect. Where there is under occupancy, tenants will receive a reduction in their income. This has already seen a shift in the mix of new schemes being brought forward resulting in two-bedroom houses being favoured over larger three- and four-bed family homes regardless of local housing demand.
There has been much made of relaxing planning legislation to stimulate growth. Regardless of what politicians think, the fact remains it is not planning legislation that is restricting development. Despite strong rental markets, banks are still being overly cautious in lending to both developers and those seeking mortgages. Until this issue is dealt with we will never achieve meaningful growth.
Furthermore, our planning system doesn’t cause anywhere near the same problems as the lack of affordable land and the demands for excessive developer contributions. If land is being banked there is little local authorities can do to make developers start building.
Suggestions to withdraw existing consents or preventing the renewal of planning permissions, is not a long-term solution and will only act as a deterrent for developers.
It is acknowledged that the construction industry is the driving force in creating a healthy economy. No other sector has a ripple effect more powerful, yet Government decided to slash affordable housing grant levels by almost 50 per cent, seriously damaging the ability of many registered providers to build.
If Housing Associations are having to borrow more than 75 per cent of the cost of a house at commercial rates it is no wonder that they question the wisdom of building at all.
The Government needs to review funding levels and relax the overly complicated system by which registered providers have to work. Increased investment in the public sector house building programme would have a very direct and immediate effect in stimulating growth.
With few exceptions, local authorities own significant areas of land that could be released for housing. While there is pressure from within to realise best value on the open market there is also an argument that negotiating with local housing associations to develop these for affordable homes is the way forward.
A more pragmatic approach to their disposal and requests for developer contributions as part of the planning process would result in a dramatic and more sustained increase in housing for the most vulnerable in our society.
Jonathon Wingfield is MD of Aacanthus WSM Architects, Leeds.